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Memphis Tennessee Bankruptcy Blog

More ways to finance a new business after bankruptcy

As previously discussed, there are ways for a Tennessee business owner to create a new business after going through bankruptcy, including starting a small business that does not require a lot of capital, or by seeking alternative means of financing. Even so, going bankrupt does not shut the door on going to traditional lenders to seek loans for your new business. There are some possibilities that a bank or a credit union might look past your bankruptcy and provide you with some financing.

Per Nerdwallet, while a bankruptcy report will stay on your record for seven years, you do not have to wait until then to approach a lender. It is true having bankruptcy on your record makes it more likely that a lender will reject your loan application, but not all lenders will make you wait the full seven years until your record is clean. There are lenders that set their own time periods for considering loan approvals from bankruptcy filers, with some lenders only needing you to wait three, two, or even just one year after your bankruptcy is completed.

How should you handle finances after bankruptcy?

When you file for Chapter 13 bankruptcy in Tennessee, you may only think about relieving your immediate financial problems. However, it is also a good idea to start thinking about how you can rebuild your finances after bankruptcy.

After bankruptcy, one of the things you will likely need to do is rebuild your credit. According to Money Crashers, it is a good idea to look over your credit report so you can see how your situation stands. Because you filed for Chapter 13, you should not owe anything on credit cards. However, there may sometimes be inaccurate information, such as a wrong balance. If you find any errors, you should usually notify your credit card company to have these errors removed. 

Does bankruptcy discharge child support payments?

Your financial situation may have suffered during your divorce. The amount of debt you took plus the lingering child support payments for the next few years leave you in a bit of a bind. You find yourself getting behind in everything. It is overwhelming.

You wonder if bankruptcy can help get things turned around for you. You need a blank slate or at least a much less cluttered one. What effect, if any, will bankruptcy have on your court-ordered child support payments?

What should you do if you cannot afford to file bankruptcy?

It is bad enough when you reach the point where you realize you need to file bankruptcy, but when you also realize that you cannot afford to file bankruptcy in Tennessee, things become even worse. It is not uncommon to worry about affording bankruptcy. After all, you are having serious financial issues if you need to file. However, to turn things around and get out from under the debt, you have to find a way to afford filing.

According to MyHorizon, many people might decide to just file bankruptcy on their own without help. This can be a huge risk and end up costing you even more money because you have to follow all the strict court rules when filing. If you make a mistake, the court will throw your case out. You also could make a mistake that results in only a portion of your debt being discharged in the bankruptcy. In both situations, it will cost you money due to the issues.

Will bankruptcy help or hurt my future credit options?

If you are one of the many people in Tennessee who faces high levels of debt that you do not know how you will ever repay, the thought of filing for bankruptcy may well have crossed your mind. Before making the choice to pursue a bankruptcy, it is wise for you to understand what and bankruptcy may or may not be able to do for your financial future.

A bankrtupcy may be a means to having your debts discharged and, in so doing, this may actually give your credit rating a boost as your debt-to-income ratio will thereby improve. However, a bankruptcy alone is not sufficient to get your credit back in good health. NerdWallet explains that there are concrete steps you can take to help make this happen.

Going over some benefits of Chapter 13

When it comes to bankruptcy, there are many options, but Chapter 13 makes the most sense for some people. There are a number of reasons why Chapter 13 can be so beneficial, and we will take a closer look at some of the benefits of Chapter 13 in this post. In Memphis, and across the state of Tennessee, too many people have allowed debt to hold them back. If you are struggling with debts that you cannot pay off, you should not hesitate to explore solutions that may be on the table.

First of all, there are some benefits that many people may not even realize. For example, a Chapter 13 bankruptcy may be listed on a credit report for less time than a Chapter 7 bankruptcy, which is crucial for people who people want to finance a vehicle, gain access to credit, etc. Homeowners who are struggling with debt may also appreciate Chapter 13 because it could help them avoid foreclosure. If you are a homeowner and are worried about losing your home because of bankruptcy, this could be a route that is worth looking into.

Can I choose which debts to pay off first?

Individuals that are just about to file for Chapter 13 bankruptcy may wonder how much flexibility they will have in paying their debts. You might want to prioritize paying off a house mortgage before you want to tackle a credit card bill. While Chapter 13 can help you give a fresh financial start in Tennessee, there are some steps in the bankruptcy process that you will not have a final say on, including which debts are to be paid first.

The U.S. Courts website explains that Chapter 13 filers can propose a repayment plan, though a credit counseling agency should have provided input on the plan beforehand. However, your bankruptcy court must approve the plan before it can go into effect. Also, the court will have the final say in whether some creditors will be prioritized over others, so you cannot expect to prioritize your creditors as you wish.

Getting the facts on adversary proceedings

Many Tennessee residents who file for bankruptcy hope that their case proceeds without any problems or detours. However, complications can result in the bankruptcy process. Perhaps a creditor does not approve of the court discharging a debt in your Chapter 7 case, or you may have an issue with a creditor. In such scenarios, an adversary proceeding may be filed.

According to FindLaw, an adversary proceeding is a form of litigation that takes place apart from the bankruptcy process, but is still heard in a bankruptcy court by a bankruptcy judge. Adversary proceedings occur when one of the parties involved has an objection to a portion of the bankruptcy. Adversary proceedings can be filed by debtors, bankruptcy trustees, or creditors.

What is an automatic stay?

For many people, bankruptcy is a way to regain control of their finances. A crucial part of this involves the automatic stay. This is an initial injunction that stops creditors from taking further action against you while a court determines whether your case qualifies you for bankruptcy. The biggest benefit of an automatic stay is that creditors stop contacting you about paying back your debt. That means no more phone calls at all hours of the day, which brings a tremendous amount of relief. 

It may not happen immediately, but an automatic stay aids the bankruptcy process. Here is what you need to know about automatic stays, so you can better understand the process as a whole. 

You can create a new business after bankruptcy

The major fear of many business owners in Tennessee is that after going bankrupt they may not be able to create a new business any time soon, if ever. However, this is not the case at all. It is true that having bankruptcy on your record is going to make it harder to raise money for a new business and that lenders may hesitate to loan you capital. Still, with the right moves, you can get yourself back in the business game sooner than you may think.

Chron.com points out that not all businesses require a lot of financing. In fact, some only need a small amount of expenses from your pocket. This allows you to forego having to convince a bank to loan you money in spite of your bankruptcy. Consider starting up a small business that you can run out of your own home. Generally, businesses such as these include consulting or convenience jobs such as landscaping, pet care or grass cutting.

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We help people file for bankruptcy relief under the Bankruptcy Code.